California Law: Arbitration of Employment Law Disputes

Question: “Is the Arbitration Agreement I was required to sign with my employer enforceable?”

Answer: “Not always.”

The California Court of Appeals recently held that an agreement was not enforceable where one of two different language versions of the agreement prohibited arbitration of representative claims for penalties under the California Private Attorney General Act.

On July 3, 2018, the California Court of Appeal issued its opinion in Juarez v. Wash Depot Holdings Inc. The Court of Appeal affirmed the trial court’s denial of a the employer’s petition to compel arbitration of plaintiff’s action for wage and hour violations under the California Private Attorneys General Act (PAGA). The court explained that an employee’s right to bring a claim under the California PAGA, providing penalties for wage and hour violations, cannot be waived. An employment agreement that compels the waiver of representative claims under the PAGA is contrary to public policy and unenforceable as a matter of state law. This is because a waiver indirectly exempts the employer from responsibility for its own violation of law.

The court also upheld the trial court’s refusal to sever a PAGA waiver and enforce the remaining arbitration agreement which was printed in both English and Spanish and where only the English-language version of the agreement contained a severability clause. The Spanish version provided that the denial of the ability to bring a PAGA claim was not severable.

The Court explained that any ambiguity had to be interpreted against the employer, explaining the two different provisions were potentially deceitful and therefore the entire agreement was unenforceable. “At best, the difference in the severability clauses in the English language and Spanish language versions of the handbook is negligent; at worse, it is deceptive. Under the circumstances, we construe the ambiguous language against the interest of the party that drafted it. (Civ. Code, §1654 . . .) . . . This rule applies with particular force in the case of a contract of adhesion. . . Indeed, Wash Depot may have left the meaning of severability ‘deliberately obscure, intending to decide at a later date what meaning to assert.’” If you have been experiencing any issues with regards to an employment contract such as an arbitration dispute, we invite you to contact our team of experienced employment lawyers.

Blady Workforce Law Group represents employees in labor and employment litigation matters. The law firm is located in the mid-Wilshire district of Los Angeles in the SAG-AFTRA building. Attorney Benjamin Blady has been practicing law for more than 25 years. Mr. Blady represents employees. If you believe you are owed wages, overtime, or other unpaid compensation by your employer, contact us online or at (323) 933-1352 today to set up a complimentary, confidential consultation. We look forward to hearing from you.